You should read the following discussion and analysis of our financial conditionand results of operations together with the condensed consolidated financialstatements and related notes included in Item 1 of Part I of this QuarterlyReport on Form 10-Q (this "Quarterly Report") and with the audited financialstatements and the related notes for the fiscal years ended December 31, 2020and 2019 included in our final prospectus filed with the Securities and ExchangeCommission on October 26, 2021 pursuant to Rule 424(b) under the Securities Actof 1933, as amended (the "Securities Act"), relating to the RegistrationStatement on Form S-1 (the "Prospectus"). Certain of the information containedin this discussion and analysis or set forth elsewhere in this Quarterly Report,including information with respect to plans and strategy for our business,includes forward-looking statements that involve risks and uncertainties. As aresult of many factors, including those factors set forth in the sectionentitled "Risk Factors, in Part II, Item 1A of this Quarterly Report," ouractual results could differ materially from the results described in or impliedby the forward-looking statements contained in the following discussion andanalysis. You should carefully read the section entitled "Risk Factors" to gainan understanding of the important factors that could cause actual results todiffer materially from our forward-looking statements. Please also see thesection of this Quarterly Report entitled "Cautionary Note RegardingForward-Looking Statements." The events and circumstances reflected in ourforward-looking statements may not be achieved or may not occur, and actualresults could differ materially from those described in or implied by theforward-looking statements contained in the following discussion and analysis.As a result of these risks, you should not place undue reliance on theseforward-looking statements. Our company assumes no obligation to revise orupdate any forward-looking statements for any reason, except as required bylaw.OverviewWe are a clinical-stage biotechnology company dedicated to enabling curesthrough hematopoietic stem cell therapy. We are focused on the development andcommercialization of safer and more effective conditioning agents and stem cellengineering to allow for expanded use of stem cell transplantation and exvivo gene therapy, a technique in which genetic manipulation of cells isperformed outside of the body prior to transplantation.Our drug development pipeline includes multiple product candidates designed toimprove hematopoietic stem cell therapy. Our lead product candidate, JSP191, isin clinical development as a novel conditioning antibody that clearshematopoietic stem cells from bone marrow in patients prior to undergoingallogeneic stem cell therapy or stem cell gene therapy. We are also developingengineered hematopoietic stem cells ("eHSC") product candidates reprogrammedusing mRNA delivery and gene editing that have a competitive advantage overendogenous hematopoietic stem cells ("HSCs") because they permit higher levelsof engraftment without the need for toxic conditioning of the patient and withpotentially lower risk of other serious complications seen with current stemcell transplants. We also plan to continue to expand our pipeline to includeother novel stem cell therapies based on immune modulation, graft engineering orcell and gene therapies. Our goal is to expand the use of curative stem celltransplant and gene therapies for all patients, including children andthe elderly.Stem cell transplantation is among the most widely practiced forms of cellulartherapy and has the potential to cure a wide variety of diseases, includingcancers, genetic disorders and autoimmune diseases. A stem cell transplantprocedure involves three main steps: (i) stem cells from the patient's ordonor's bone marrow are collected; (ii) the patient's bone marrow is cleared ofany remaining stem cells in order to make space to receive new transplanted stemcells, which is known as conditioning; and (iii) the new stem cells aretransplanted into the patient via infusion where they fasten to, or engraft in,the bone marrow and grow into the blood and immune cells that form the basis ofreset and rebuilt blood and immune systems. Transplants are either allogeneic orautologous, depending on the source of the new stem cells for the transplant. Inan allogeneic transplant, patients receive cells from a stem cell donor. In anautologous transplant, the patient's own stem cells are used. Autologoustransplants also include stem cell gene therapies, where cells are collectedfrom the patient, edited to either enable a functioning gene or correct adefective gene, and then transplanted into the patient via infusion. Ourprograms span both allogeneic and autologous transplants, with initial programsin JSP191 based on an allogeneic approach.Currently, patients must receive highly toxic and potentiallylife-threatening conditioning agents to prepare their bone marrow fortransplantation with either donor stem cells or their own gene-edited stemcells. Younger, fitter patients capable of surviving these toxic side effectsare typically given myeloablative, or high-intensity, conditioning whereas olderor less fit patients are typically given reduced intensity, but still toxic,conditioning which leads to less effective transplants. These toxicities includea range of acute and chronic effects to the gastrointestinal tract, kidneys,liver, lung, endocrine, and neurologic tissues. Depending upon the conditioningregimen, fitness of the patient, and compatibility between the donor andrecipient, the risk of transplant-related mortality ranges from 10% to more than50% in older patients. Less toxic ways to condition patients have been developedto enable transplant for older patients or those with major comorbidities, butthese regimens risk less potent disease elimination and higher rates of diseaserelapse. Even though stem cell therapy can be one of the most powerful forms ofdisease cure, these limitations of non-targeted conditioning regimens have seenlittle innovation over the past decade. 26 [[Image Removed]]Our lead product candidate, JSP191, is a monoclonal antibody designed to block aspecific survival signal on stem cells and is in development as a highlytargeted conditioning agent prior to stem cell therapy. We are developing JSP191for severe combined immunodeficiency ("SCID") for which we are currentlyconducting an open label Phase 1/2 clinical trial in two cohorts of SCIDpatients: patients with a history of a prior allogeneic transplant for SCID butwith poor graft outcomes and newly diagnosed SCID patients. The primary endpointin Phase 1 is to evaluate the safety and tolerability of JSP191. The two primaryefficacy endpoints in Phase 2 are the proportion of subjects achieving adequatedonor HSC engraftment and the proportion of subjects achieving nave T cellproduction greater than or equal to 85 cells/uL, a level expected to provideimmune reconstitution, during weeks 36 to 104 post-transplant. Based onpreliminary results from our ongoing Phase 1/2 clinical trial, we believe JSP191has demonstrated the ability as a single agent to enable engraftment of donorHSCs as determined by donor chimerism, or the percentage of bone marrow cells inthe patient that are of donor origin after transplant. Five out of the first sixpatients produced nave T cells at a level expected to provide improved immunefunction by two years post-transplant. No JSP191 treatment-related seriousadverse events have been reported to date and pharmacokinetics have beenconsistent with earlier studies in healthy volunteers. We expect to completeenrollment in this Phase 1/2 clinical trial by the end of 2022.

The FDA has granted rare pediatric disease designation to JSP191 as aconditioning treatment for patients with SCID. In addition, the FDA grantedorphan drug designation to JSP191 for conditioning treatment prior tohematopoietic stem cell transplantation.

We have an exclusive license agreement with Amgen Inc. ("Amgen") for thedevelopment and commercialization of the JSP191 monoclonal antibody in allindications and territories worldwide. We also have an exclusive licenseagreement with Stanford for the right to use JSP191 in the clearance of stemcells prior to the transplantation of HSCs. We also entirely own theintellectual property for our eHSC platform, which has been internallydeveloped.

We expect our expenses will increase substantially in connection with ourongoing and planned activities, as we:

? advance product candidates through preclinical studies and clinical trials;

? procure the manufacture of supplies for our preclinical studies and clinical

? attract, hire and retain additional personnel;

? operate as a public company;

? implement operational, financial and management systems;

? pursue regulatory approval for any product candidates that successfully

complete clinical trials;

? establish a sales, marketing, and distribution infrastructure to commercialize

any product candidate for which we may obtain marketing approval and related

commercial manufacturing build-out; and

? obtain, maintain, expand, and protect our portfolio of intellectual property

Business Impact of the COVID-19 Pandemic

Business Combination Agreement

Refer to Note 3 in our interim condensed consolidated financial statementsincluded in Part I, Item 1 of this Quarterly Report for further details on theaccounting for this transaction.

Other collaboration and clinical trial agreements

Collaboration with Stanford University

Collaboration with the National Heart, Lung, and Blood Institute

Collaboration with the National Institute of Allergy and Infectious Diseases

In May 2021, we entered into a clinical trial agreement with the NationalInstitute of Allergy and Infectious Diseases ("NIAID") in which NIAID will serveas the IND sponsor of a Phase 1/2 clinical trial to evaluate JSP191 as atargeted, non-toxic conditioning regimen prior to allogeneic transplant forchronic granulomatous disease. Each party incurs its own costs under thisagreement.

Collaboration with Graphite Bio

In January 2021, we entered into a clinical collaboration with Graphite Biofor X-SCID by administering JSP191 antibody into mice prior to GPH201 genereplacement therapy. We will provide materials to use in such studies. GraphiteBio may also exercise its exclusive option to become our sole developmentpartner for JSP191 in the field of gene therapy for SCID patients with X-SCID.

Collaboration with Aruvant Sciences GmbH

In June 2021, we entered into an agreement with Aruvant Sciences GmbH ("AruvantSciences") for SCD gene therapy. We will provide materials to use in suchstudies. The collaboration with Aruvant Sciences is non-exclusive.

Collaboration with the National Cancer Institute

Collaboration with AVROBIO, Inc.

In October 2021, we entered into a clinical trial and supply agreement withAVROBIO, Inc. ("Avrobio"). Pursuant to this agreement, Avrobio will collaboratewith us on clinical trials using JSP191 with one or more of Avrobio's genetherapy programs. We will provide the materials to use in such studies. Thecollaboration with Avrobio is non-exclusive.

Components of Results of Operations

External research and development costs include:

? costs incurred under agreements with third-party CROs, CMOs and other third

parties that conduct preclinical and clinical activities on our behalf and

manufacture our product candidates;

? costs associated with acquiring technology and intellectual property licenses

that have no alternative future uses;

? consulting fees associated with our research and development activities; and

? other costs associated with our research and development programs, including

Internal research and development costs include:

? employee-related costs, including salaries, benefits and

stock-based compensation expense for our research and development personnel;

? other expenses and allocated overheads incurred in connection with our research

Our future research and development costs may vary significantly based onfactors, such as:

? the scope, rate of progress, expense and results of our discovery and

preclinical development activities;

? the costs and timing of our chemistry, manufacturing and controls activities,

including fulfilling cGMP-related standards and compliance, and identifying and

? per patient clinical trial costs;

? the number of trials required for approval;

? the number of sites included in our clinical trials;

? the countries in which the trials are conducted;

? delays in adding a sufficient number of trial sites and recruiting suitable

patients to participate in our clinical trials;

? the number of patients that participate in the trials;

? the number of doses that patients receive;

? patient drop-out or discontinuation rates;

? the duration of patient participation in the trials and follow up;

? the cost and timing of manufacturing our product candidates;

? the phase of development of our product candidates;

? the efficacy and safety profile of our product candidates;

? the timing, receipt, and terms of any approvals from applicable regulatory

authorities, including the FDA and non-U.S. regulators;

? maintaining a continued acceptable safety profile of our product candidates

following approval, if any, of our product candidates;

? changes in the standard of care on which a clinical development plan was based,

which may require new or additional trials;

? the extent to which we establish additional strategic collaborations or other

? the impact of any business interruptions to our operations or to those of the

Other Income (Expense), Net

Three Months Ended September 30, 2021 and 2020

The following table summarizes our results of operations for the three monthsended September 30, 2021 and 2020 (in thousands, except percentages):

Research and Development Expenses

The following table summarizes our research and development expenses for thethree months ended September 30, 2021 and 2020 (in thousands):

External costs:CRO, CMO and other third-party preclinical studies andclinical trials

696

Our external costs by program for the three months ended September 30, 2021 and2020 were as follows (in thousands):

General and Administrative Expenses

Total other income (expense), net increased by $11.5 million, from $4.8 millionother expense to $6.7 million other income for the three months endedSeptember 30, 2021 and 2020, respectively.

Nine months ended September 30, 2021 and 2020

The following table summarizes our results of operations for the nine monthsended September 30, 2021 and 2020 (in thousands, except percentages):

Research and Development Expenses

External costs:CRO, CMO and other third-party preclinical studies andclinical trials

2,093

1,000

-

Research and development expenses increased by $5.5 million, from $11.2 millionfor the nine months ended September 30, 2020, to $16.8 million for the ninemonths ended September 30, 2021.

Our external research and development expenses by program were as follows forthe nine months ended September 30, 2021 and 2020 (in thousands):

General and Administrative Expenses

Other Income (Expenses), Net

Total other income (expense), net increased by $10.1 million for the nine monthsended September 30, 2021 as compared to the same period of 2020.

Liquidity and Capital Resources

Future Funding Requirements

Our future financing requirements will depend on many factors, including:

? the timing, scope, progress, results and costs of research and development,

preclinical and non-clinical studies and clinical trials for our current and

? the number, scope and duration of clinical trials required for regulatory

approval of our current and future product candidates;

? the outcome, timing and costs of seeking and obtaining regulatory approvals

from the FDA and comparable foreign regulatory authorities for our product

Read the original here:

JASPER THERAPEUTICS, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q) - marketscreener.com

Related Post

Leave a comment

Your email address will not be published. Required fields are marked *


Refresh